Navigating the ever-evolving investment landscape, one can’t help but be drawn to the captivating narrative surrounding cannabis stocks. The allure isn’t just in its novelty but its burgeoning promise. According to Pew Research, a staggering 88% of U.S. adults advocate for legalizing marijuana for both medical and recreational use. As states push for legalization and with more research highlighting cannabis’s potential health benefits, the idea of cannabis stocks will always remain relevant. However, it’s crucial to discern the wheat from the chaff. While some cannabis enterprises floundered in their nascent stages, others are flourishing, notably in the edibles sector. Given the current market ambivalence, several cannabis stocks appear primed for significant trajectories in the imminent future.
Cannabis Stocks to Buy: Cresco Labs (CRLBF)
In the bustling U.S. cannabis landscape, Cresco Labs (OTCMKTS:CRLBF) is one of the most promising players in the sector. This powerhouse cultivates, manufactures and markets retail and medical cannabis products in the country.
With a vertically integrated model spanning 10 different states, Cresco tightly holds the reins on its operations and a network of about 68 dispensaries, paving the way for a broad growth canvas.
Furthermore, while the firm registers net losses, it’s noticeably leaner than peers in the cannabis realm. Cresco’s secret sauce might well be its vertical integration, which leads to a tighter operational leash, thereby trimming losses. Additionally, based on analyst estimates, it is making excellent progress in terms of breaking even, with a negative 13 cents EPS projection for fiscal 2024 compared to its basic EPS, at a negative 71 cents last year.
Curaleaf Holdings (CURLF)
Curaleaf Holdings (OTCMKTS:CURLF) is basking in the spotlight of rescheduling efforts, with its stock price rising over 61% in the past month.
Sporting 150 dispensaries across a wide expanse of 18 states, Curaleaf’s deep-seated presence in the U.S. positions it as a chief contender to reap the rewards from potential cannabis rescheduling. Though classified under the penny stock umbrella, Curaleaf stands on robust financial pillars. Despite the economic tumult, it effectively keeps its revenue stream flowing undeterred.
Delving deeper, the company’s influence extends over 21 cultivation sites, granting it an impressive scale and vertical integration edge. Moreover, with the coveted title of the top cannabis operator by sales, Curaleaf forecasts a whopping $1.3 billion in sales for 2023. Despite the economic challenges, the company has done relatively of late, recording a 3% year-over-year (YoY) increase in second-quarter sales. Moreover, it flaunts a 44% gross margin and positive free cash flow, indicative of its proficiency in operational execution. With emerging markets like New Jersey and New York gearing up, Curaleaf’s growth trajectory appears steeply inclined.
TerrAscend (TSNDF)
TerrAscend (OTCMKTS:TSNDF) is making waves in the cannabis sphere, primarily focusing on the U.S. and Canadian markets. Beyond the production of its hemp wellness offerings, it has effectively carved a niche with its artisan-inspired edibles.
This rising star hasn’t shied away from strategic growth, either. Its acquisition game is strong, evidenced by the recent takeover of Herbiculture, a Maryland-based medical dispensary. The move aims to expand its footprint and increase its EBITDA and cash flows significantly.
Financially, TerrAscend shines. Its second-quarter results flaunted a robust 12.7% YoY revenue surge to $72.1 million, paired with an impressive gross profit margin of 50.2%. Moreover, its forward-looking projections for 2023 are equally ambitious, with anticipated net sales of at least $305 million and adjusted EBITDA of $58 million, indicating YoY growth rates of 23% and 49%, respectively.
Given its promising financial performance and savvy acquisitions, the company seems poised for a breakout trajectory.
On the date of publication, Muslim Farooque did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
